Correlation Between Sunrise New and Elong Power

Can any of the company-specific risk be diversified away by investing in both Sunrise New and Elong Power at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sunrise New and Elong Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunrise New Energy and Elong Power Holding, you can compare the effects of market volatilities on Sunrise New and Elong Power and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sunrise New with a short position of Elong Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Elong Power.

Diversification Opportunities for Sunrise New and Elong Power

0.83

Correlation Coefficient

Sunrise New  Elong Power

Very poor diversification

The 3 months correlation between Sunrise and Elong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Elong Power Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elong Power Holding and Sunrise New is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sunrise New Energy are associated (or correlated) with Elong Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elong Power Holding has no effect on the direction of Sunrise New i.e., Sunrise New and Elong Power go up and down completely randomly.

Pair Corralation between Sunrise New and Elong Power

Given the investment horizon of 90 days Sunrise New Energy is expected to generate 0.62 times more return on investment than Elong Power. However, Sunrise New Energy is 1.6 times less risky than Elong Power. It trades about -0.04 of its potential returns per unit of risk. Elong Power Holding is currently generating about -0.22 per unit of risk. If you would invest  101.00  in Sunrise New Energy on September 16, 2024 and sell it today you would lose (28.00) from holding Sunrise New Energy or give up 27.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sunrise New Energy  vs.  Elong Power Holding

Sunrise New Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunrise New Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Elong Power Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elong Power Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sunrise New and Elong Power

The main advantage of trading using opposite Sunrise New and Elong Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrise New position performs unexpectedly, Elong Power can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Elong Power will offset losses from the drop in Elong Power's long position.

The idea behind Sunrise New Energy and Elong Power Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.